Chinese steelmakers report declining profits in January-February

In China's steel industry, profits almost halved in the first two months of 2019 from a year earlier as production growth accelerated.

According to the National Development and Reform Commission in the country, in January-February, the sector's profit was 29.6 billion yuan (about US $ 4.4 billion), down 49.5% from the same period last year.

The decline in profits was due to the fact that the market supply continued to grow. Steel production rose 9.2 percent to 149.6 million tons, 3.3 percentage points faster than the same period last year.

Rolled steel production increased by 10.7 percent to 171.5 million tons, up 6.1 percentage points over the previous year.

Steel exports increased by 12.9 percent and reached 10.7 million tons, while imports decreased by 9.9 percent to 2 million tons.

As a result of government efforts to reduce overcapacity, the steel market has recently recovered, prompting some companies to try to expand capacity, according to Liu Guixin, an inspector in the raw materials department of the Ministry of Industry and Information Technology.

As production rises, the supply and demand balance of the steel market can easily be reversed, an official warned at an industry forum last week.